Roadmaps and action plans On route to successful implementation of ETS systems Alyssa Gilbert Developed by Dian Phylipsen, SQ Consult Alyssa Gilbert, Ecofys Supporting the Design and Implementation of Emissions Trading Systems in China - 中欧碳交易能力建设项目 Beijing, 15-9-2014 This project/programme is funded by the European Union Project implemented by ICF International together with Sinocarbon, SQ Consult and EcofysCurrent status Well-functioning China National ETS Road maps Cap setting Allocation MRVA Registry Market oversight Capacities built over time Supporting the Design and Implementation of Emissions Trading Systems in China - 中欧碳交易能力建设项目What are roadmaps action plans Generic A roadmap shows how a destination can be reached – Potential different routes, potential stops on the way A policy roadmap often describes a specific route to achieve a poliy objective This can differ in level of aggregation/detail, geographical scope, sector, timeline, type of ination technical, legal, instiutional, etc – Long-term policy outlook or concrete steps to reach specific milestones/objectives An action plan is a further elaboration of how to implement a roadmap – Difference between the two depends on contents, level of detail of roadmap – An action plan is more detailed, concrete Important elements in both – Building blocks – Entities involved – Responsibilities for milestones, actions – Steps, actions, milestones – Timing of milestones, deliverables, actions – Inter-dependencies between building blocks, actionsWhy roadmaps Action plans To move from ulated policy objectives towards implementation of specific activities to achieve those objectives – Practice of implementation determines effectiveness of policy – Requires policy choices are made in a timely manner – Implementation almost always takes more time then foreseen To identify intermediate steps and deliverables – Earlier identification of deviations, shortcomings, gaps – Earlier possibility to adjust course if needed To identify engage entities involved and establish responsibilities – Increased understanding among involved entities – Improved accountability in case corrective action is needed To establish timelines for actions, achievements – Earlier identification of delays – Timely decision-making, ensurance of sufficient progress to targets To understand interdependency of different actions, milestones – Ensurance of optimal order and definition of actions, milestonesElements of a roadmap/action plan Dimensions, tracks – Political/policy – Legal/Legislative – Institutional – Technical Topic areas building blocks in this project – Roadmaps action plans – Cap-setting – Allocation – MRVA – Registries – Market oversight – Other design issues policy interaction Requirements – Steps/actions – s/outputs – Order, interdependencies – Timelines/deliverables – Entities, responsibilities – Budgets – Coordination, uation revision processEstimate potential, costs Set up registry Decide on policy instru- ment Establish Transac- tion Log Define MRV rules Decide on environ- mental target Decide on effort sharing sectors, regio ns Define coverage installation, threshold Decide on compen- sation measures Legislation to set up new entities Legislation setting market rules Identify roles responsi- bilities Set up market authority Identify need for new/changed institutions Policy Technical Legal/legislative Institutional Current local context Well-functioning ETS Data gathering Define coverage installation, threshold Define bench- marks Establish Auctioning plat Decide on allocation approach Decide on link to credit markets Decide on cap Set up national emissions authority Stakeholder consultation Stakeholder consultation Stakeholder consultation Develop verification accreditation system Assess competitive ness effects Legislation to establish ETS system Legislation on. Legislation on taxation, VA T rules Decide on new entrants closures rules Establish base line data Data gathering Examples Roadmap to ETS in Chile MRPBuilding blocks for market readiness according to IEA/OECDEU ETS Phase III workplanWithout a proper roadmap Delays occur because the road is longer than expected – This can result in a later arrival, or in more effort/cost that need to be spend to make up lost time Delays occur because of detours, wrong turns are taken, which needs to be corrected – In some cases, decisions are ‘locked-in’ too early, because interdependencies are not taken into account. This can be difficult to correct Planned stops on the route are missed, resulting in a very different trip A different destination is reached than planned The trip is abandoned all together NB also roadmaps may require updating from time to timeExamples Delays – New Zealand and various US regional systems started later than planned – EU ETS allocations approved too late after start of trading period, leading to uncertainty with operators, market – EU ETS, Chinese pilot allowing credit use before required mechanism for submission for compliance was ready, requiring ‘shadow book keeping’ Detours – EU ETS changing the definition of installations, changing which installations are covered by the system and which not – EU ETS leaving many decisions to MS, leading to limited environmental impact and competitive distortions, requiring harmonisation later on Different destination type of system reached – UK, Denmark national system replaced by EU ETS with quite different characteristics – Tokyo system, corporate systems only sellers, no buyers because of voluntary participation – Various systems Use of unexpected large amounts of credits, resulting in low prices, limited domestic action – EU ETS lock-in distribution of effort over ETS/non-ETS sectors left to MS, leading to competitive distortion till end of Phase II Trip abandoned – Australian ETS cancelled after 2 years of operation due to insufficient ensuring of political support in development phase after attempting different stops and destinations – Canadian ETS never reached implementation stage due to not dealing sufficiently with differences between regions and lack of political support – US – RGGI various US states dropped out of the systemConclusions lessons learned Making a roadmap is an important step in the policy development process Roadmap action plans are important tools to plan and steer the policy implementation process, and redirect when necessary Making them public can strengthen stakeholder engagement and create confidence, and stimulate accountability and timely delivery Roadmaps action plans should be – Eased on best evidence – Taking into account local circumstances – Endorsed by all parties involved – Specific and detailed, requiring actions Roadmaps action plans should be seen as living documents, with a mechanism for review under certain circumstances and with clear timetableFor further ination Dian Phylipsen SQ Consult BV Alyssa Gilbert Ecofys BV